If a U.S. firm's cost of goods sold exposure is much greater than its sales exposure in Switzerland, the Swiss franc's depreciation against the dollar will have a ____ overall impact on ____.

Question

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When a U.S. firm's cost of goods sold exposure is much greater than its sales exposure in Switzerland, a depreciation of the Swiss franc against the dollar means that the costs of goods sold (denominated in Swiss francs) decrease more significantly than the sales revenue in Swiss francs. This leads to a higher gross profit margin, hence a positive impact on gross profit.

If a US Firm's Cost of Goods Sold Exposure Is Much Greater